The FTSE 100 clung on to gains on Wednesday after miners drove the index higher in early trade, and UK bond market tensions eased.
London’s leading index was 0.1% higher after starting the session on the front foot, before gains faded as the session progressed.
“The FTSE 100 bounced back on Wednesday despite continuing tensions in the Middle East and as the political situation in the UK remained fraught,” said AJ Bell investment director Russ Mould.
Although long-dated UK government bond yields were slightly higher on Wednesday, they did not surpass yesterday’s highs, easing traders’ concerns. The 30-year UK bond yield hit its highest levels since the 1990s yesterday.
But today may prove a brief reprieve if Labour embarks on a leadership contest that threatens the fiscal prudence it has pursued in the early stages of this parliament.
A minor sense of relief was evident among FTSE 100 banks, which recovered some of yesterday’s losses. Lloyds shares rose around 1% while NatWest added 0.3%.
Miners were the key driving force behind today’s rally, with Anglo American rising 4% and Antofagasta adding 3.7%.
Firming precious metals prices helped Fresnillo rise 3.5%.
JD Sports shareholders will be disappointed to see the stock down again, with last week’s rally shaping up to be strength that traders sell into. JD Sports was down 1.3%.
Babcock shares were 0.5% higher on the back of an encouraging update that showed underlying earnings were robust despite a £140m charge.
“Having stormed ahead for much of the past 18 months, Babcock’s share price has taken a pause for breath in recent weeks, but its latest update has helped to restore momentum,” Russ Mould said.
“Investors were prepared to look past a charge relating to a Royal Navy contract, agreed in 2019 at a fixed price and where costs have escalated, to focus on the unchanged guidance for the current financial year and a new £200 million share buyback. “
Intertek was again the best performer on the day after the board was persuaded to accept EQT’s latest offer of 6,000p for the company. Having received an initial bid of 5,150p, the Intertek board have squeezed nearly another 20% for its shareholders.
Intertek is far from the most glamorous FTSE 100 company, but it will nonetheless be sad to see another high-quality London firm leave the public markets.